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Date Posted: June 21, 1996
Contact Person: Richard Smith, Director, Bureau of Legal Services
Phone Number: (608) 267-6704

Division's Policy Relating to Hip & Shoulder Injuries While the Case of Hagen v. LIRC is on Appeal to the Supreme Court

__________________________________________________________________________

June 21, 1996

TO: Worker's Compensation Insurance Carriers, Self-insured Employers

FROM: Gregory Krohm, Administrator
Worker's Compensation Division

Purpose: Division's Policy Relating to Hip and Shoulder Injuries While
the Case of Hagen v. LIRC is on Appeal to the Supreme Court

On March 14, 1996, the District IV Court of Appeals held in Hagen v. LIRC (No.
94-9384) that shoulder injuries are not scheduled. If the decision stands, the permanent
partial disability rating for shoulder injuries would be applied to 1,000 weeks rather than
500 weeks and the possibility of loss of earning capacity claims would arise in a number
of cases. The holding reverses more than 80 years of statutory interpretation and is
currently on appeal to the Supreme Court. It is generally agreed that the Court of
Appeal's reasoning regarding the shoulder is equally applicable to the hip.

Each year, there are more than 5,000 hip and shoulder injuries reported to the Worker's
Compensation Division. Moreover, unlike changes enacted by statute, the impact of the
court's decision is retroactive. Assuming a significant number of these injuries will result
in loss of earning capacity claims, the appellate court's decision could have a serious
workload impact on the Division. Equally important is the likelihood that litigation costs
will escalate in a significant number of cases due to expanded use of vocational reports
and expert testimony by all parties to a claim.

In the past, to avoid scheduling problems for the Division and litigation expenses for the
parties, the Division has occasionally delayed scheduling cases involving certain issues
until the final resolution of those issues through the appeals process. Assuming the
Supreme Court agrees to accept the Hagen case on appeal, it could be another year or
so before we have their decision. In the meantime, it is unreasonable and contrary to
sound public policy to delay worker's compensation hearings on all hip and shoulder
injuries for that length of time due to the serious financial hardship it may cause for
many injured workers and their families.

Rather than delay hearings in such cases, the Division's administrative law judges
recommend that we implement the following policy for handling shoulder and hip claims
until the final outcome of the Hagen case is known:

1. In litigated shoulder and hip cases where compensation is awarded for permanent
partial disability, the disability should be awarded for a scheduled injury with an
interlocutory order issued to reserve jurisdiction for further action in determining
permanent disability using 1,000 weeks rather than 500 weeks and/or loss of earning
capacity.

2. For shoulder and hip injury cases also involving another unscheduled part of the body
our practice should not change. Compensation should be awarded for permanent partial
disability as a scheduled injury based on a maximum of 500 weeks and loss of earning
capacity claims may be based on the unscheduled component of the injury as in the past.
Interlocutory orders should be issued reserving jurisdiction for future action on whether
the shoulder or hip injury is unscheduled.

3. There will be no change in litigated cases which are determined to be not
work-related. These cases will be dismissed with no interlocutory order issued.

I concur and strongly encourage all parties to disputed claims to voluntarily agree to
present their respective cases pursuant to this policy until the Supreme Court reaches a
decision in the Hagen case.

For purposes of claims monitoring and preparing worksheets on permanent partial
disability, the Worker's Compensation Division will continue to treat shoulder and hip
injuries as scheduled, i.e., maximum permanent partial disability of 500 weeks, until a
decision is reached in the Hagen case. Shoulder and hip injuries clearly involving
unscheduled parts of the body will be treated as having scheduled and unscheduled
components according to the circumstances of the particular case as they are under
current procedures. It is our intention not to change the Division's internal practices and
procedures until the Supreme Court reaches a decision in the Hagen case.

If you have any questions, please feel free to contact the Worker's Compensation
Division. Thank you.


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